Holiday Cheer in the Direct-to-Consumer Wine Shipping Channel

The holiday season is known for the warmth and generosity it inspires in people, but it’s also an incredibly important time of year for wineries. December is a busy month for most companies in business-to-consumer industries due to the holiday rush, and the direct-to-consumer (DtC) wine shipping channel is no different. October, November, and December have historically been among the strongest-performing months of the year for DtC shipments, both in terms of value and volume.

In fact, these three months have seen nearly 40 percent of the total annual value in the DtC channel in both 2016 (39 percent) and 2017 (38.4 percent), despite only making up one quarter of the calendar year. Likewise, the volume of DtC shipments has traditionally been stronger in the fall. In 2016, about 36 percent of sales for the year fell between October and the end of December, a number that dipped by less than half a percentage point in 2017.

Stay tuned for our upcoming 2019 Direct to Consumer Wine Shipping Report, set to be released in mid-January, for insights on how the DtC channel performed this year in comparison.

 

What’s the outlook for holiday DtC wine shipping?

The cause of the surge in sales during autumn is generally due to consumers stocking up on booze in advance of – and during – the holiday season in preparation of parties and big events. This works out well for many wineries, timing-wise, as harvesting tends to slow toward the end of the summer and they can focus their internal resources on preparing for the big holiday swoon.

With more states passing legislation to embrace the direct-to-consumer channel each year, wine producers can look forward to continued growth across the country. Pennsylvania legalized DtC wine shipping two years ago and exploded on the scene last year with a 158 percent increase in shipments.

But the Keystone state wasn’t finished; our midyear data showed a further 44 percent uptick in sales to Pennsylvania consumers through the first six months of 2018. These numbers figure to be even more impressive after the high-volume holiday season comes to a close.

 

How can my winery prepare to grow in the DtC channel?

It’s unreasonable to expect each state that authorizes DtC shipping to immediately become fertile destinations like Pennsylvania has, and only a handful of states that do not allow DtC shipping remain. But this year-over-year growth in that state demonstrates consistent upward trajectory in the channel. Remember, DtC wine shipping has only been legal anywhere in the United States since the famed Granholm decision of 2005, so this channel remains a relatively new market that has yet to realize its full potential.

Wineries can expect residents of established DtC states and newer DtC states alike to continue buying wine via this channel in exponentially greater volumes. It may make sense for your winery to consider expanding sales into new states. To navigate the different rules and regulations in each state and ensure you are in compliance when branching out, head over to our Direct-to-Consumer Wine Shipping Rules tool.

 

 

See for yourself how ShipCompliant by Sovos can help your winery stay on top of compliance for your DtC shipping efforts. Request a demo today.

 

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